High interest rates do not deter home buyers
PHOTO: M. PERIASAMY
STILL VIBRANT:Investing in property continues to be the best bet despite lending rates going up.
The construction sector is no exception to the spiralling prices, and, as a result property prices, including residential units, are moving up. Further, interest rates for home loans have been revised by many banks. For those moving into Coimbatore, which has a high concentration of industries, these can be deciding factors to purchase a new house.
According to a banker here, though home loan rates have been increased by several banks, consumers feared that if they waited for the rates to come down, they will miss the property. Apart from the interest rates, property prices are also the main factors that determine the purchasing decision of a customer. When customers finalise on a property, they will go ahead and buy it even if interest rates are revised, according to bank officials.
Hence, though banks have revised the home loan rates, off-take of home loans is expected to be higher this year compared to last year. For instance, the State Bank of India is targeting home loan disbursement of Rs. 350 crore in 2011-12 in Coimbatore district as against Rs. 200 crore last year.
Coimbatore is a growing city and the number of people moving into it for jobs is on the rise. Hence, the demand for housing is also high, says an official of the Bank. The average loan amount taken to buy a house is about Rs. 30 lakh. “Consumers fear that they may miss the bus if they do not buy a property now,” he says.
The demand in Coimbatore is mainly for apartments, especially those in the Rs. 30 lakh to Rs. 40 lakh price bracket. This is an affordable segment and hence the demand will continue for properties in the sub-Rs. 30 lakh properties, adds another bank official.
Property developers here point out that as inflationary pressure builds up and banks tighten the lending rates, property markets in cities such as Mumbai and New Delhi are said to be witnessing a decline in demand. While some big cities in the North have already seen a 20 per cent dip in demand, the impact was not much in the South now, they say.
M. SOUNDARIYA PREETHA
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